Brookfield Asset Management .(US:BAM)2021-12-08 19:05Financial Data and Key Metrics Changes - The company aims to double fee-bearing capital over the next five years, focusing on growth initiatives in private markets [1] - The flagship funds are designed for institutional clients, with sizes ranging from $15 billion to $20 billion, indicating a mature business model [5][6] - The company is currently in a fundraising cycle, targeting to raise $100 billion, including $70 billion from third-party capital [4] Business Line Data and Key Metrics Changes - The global transition fund has raised about $7 billion, with potential growth to over $200 billion in the future, focusing on energy transition investments [12][14] - The infrastructure business is expected to grow significantly due to increased government spending and privatization trends [17][18] - The company is developing core private market solutions, with a target of $60 billion in core-related strategies [19][20] Market Data and Key Metrics Changes - Institutional clients are increasingly shifting funds from fixed income to alternatives, with a notable $65 billion liquidated from fixed income securities [20][21] - Retail investors are also moving towards semi-liquid products that offer higher returns compared to traditional bank accounts [22] Company Strategy and Development Direction - The company is focusing on creating more products for both institutional and retail clients to provide fixed income alternatives [3] - There is a strong emphasis on transitioning to net-zero investments, leveraging the company's experience in renewables and infrastructure [14][15] - The infrastructure bill in the U.S. is expected to push states towards privatization, creating more opportunities for the company [17] Management's Comments on Operating Environment and Future Outlook - Management believes that the current low-interest-rate environment necessitates the development of replacement products for fixed income [3] - The company is confident in its ability to generate consistent returns, even in a changing market landscape [10][11] - The management sees significant growth potential in the insurance sector, particularly in reinsurance and annuities [29][31] Other Important Information - The company has rebranded its private REIT, which now has $1 billion in assets under management, targeting wealth clients [24][25] - The company is actively expanding its distribution channels for wealth management products [26] Q&A Session Summary Question: What are the key focuses for the organization over the next 12 to 18 months? - The focus will be on creating more products for clients and expanding into alternative investments [2] Question: How is the company addressing the demand for flagship products? - The company is adjusting the size of its flagship funds based on market demand and institutional partnerships [4][5] Question: What is the outlook for the infrastructure business following the recent infrastructure bill? - The infrastructure business is expected to grow significantly as governments move towards privatization [17][18] Question: How does the company plan to scale its insurance initiatives? - The company plans to grow through organic originations and additional acquisitions, while currently funding the business internally [29][31] Question: What is the company's approach to capital allocation? - The company is focused on balancing capital allocation between growth initiatives, buybacks, and dividends, with a preference for investing in business growth [35][36]